If your credit score is low, you are unlikely to obtain a loan or a credit card when you need it. And if you do, it will not be a beneficial rate. Avoid these pitfalls by building better credit.
Guide to Credit Building—Steps To Boost Credit Score
A bad credit rating can limit the borrowing options of a person. Defaulted payments and bankruptcy orders leave a black mark against one’s name. It is essential to start improving the credit score as soon as possible. It is tedious job demanding one’s time money and patience.
Steps to boost ones credit score—
• Deleting Errors on the credit report in a short time is the fastest way to improve credit score. This can be done through a bank or a mortgage company. Proper paperwork and proofs are required to prove that the item is correct.
• Piggyback Someone’s Credit is a great credit score booster. This is done by putting someone else’s adds to one’s account. This can be done only when there is trust in the person whose account is added. It is difficult to find a trusty person. But the trusted person could add the other person as a cardholder and not give the facility to operate his accounts.
• Playing Round Robin is one of the oldest strategies for credit building. This is done by secured saving account or by secure credit cards. The new checking account is used to make payments on the new credit cards regularly on time.
• Paying off bills on Time will increase the credit score. Credit companies make lots of money when loans are not paid in time, but the credit goes down.
• Pay down Debts is a method that is not transparent. Paying off debt is different from managing the debt. Payment should be made only of the amount that will improve the credit profile.
• Never close accounts because the longer an account is open with no negative reports; it reflects a better credit score.
• No New Credit should be taken if the credit score needs to be increased. Each credit will call for an inquiry that is added in the report. This naturally drops the credit score.
• A fresh credit card will be helpful if credit is to be taken because there is no the new credit card. Possess 3-5 credit cards for different purposes to obtain personal credit.
• Bankruptcy or Foreclosure should not be filed. These remain on the record for several years and always decrease the credit score. It is legally possible to delete a bankruptcy and foreclosure by advanced methods.
Advice to Teenagers on Credit building
• Study and learn the ways of credit building
• Save money to buy a security card.
• Make it a habit to pay bills in time.